Over a year ago I identified real (inflation-adjusted) retail sales as the "Holy Grail," i.e., best single leading indicator for job growth. With Monday's retail sales and yesterday's inflation reports, we can update the graph comparing real retail sales and jobs.
First, here are the absolute numbers (note in this first graph I am using private jobs rather than full payrolls to take out the census distortions):
As of October, real retail sales have made up more than half of their losses during the Great Recession.
Here are the year over year percentage comparisons:
In 4 of the last 7 months, real retail sales have been up over 6%. Based on 65 years' worth of data, this translates into, at minimum, 2% (or about 2.5 million jobs) year over year job growth, sometime soon. Whether "soon" is more like 6 months or 24 months is impossible to tell, but the trend is unequivocally positive.
